BENGALURU/MUMBAI: Demand for physical gold picked up this week as the approaching Chinese New Year encouraged buyers in China and Singapore, with dealers expecting more purchases in coming weeks.
Chinese dealers charged $0.50-$4 an ounce over benchmark spot gold prices, unchanged from last week when they added a premium having been forced to offer heavy discounts for much of 2020 as the pandemic squeezed retail demand.
Buying crept up in Singapore and is expected to recover in the coming weeks, traders said. Prices ranged between flat to benchmark spot gold and a premium of $1.4 an ounce, versus last week’s $0.80-$1.80.
“We envisage strong retail demand outlook over the next few months on the back of seasonal factors such as the upcoming Chinese New Year and the new 2021 bullion coin releases from the major national mints,” said Ronan Manly, precious metals analyst at BullionStar Singapore.
Indian dealers were charging a premium of up to $1 an ounce over official domestic prices this week, inclusive of 12.5% import and 3% sales levies and up from last week’s premium of $0.5.
“Slowly demand has been improving. Retail buyers are making purchases for weddings,” said Harshad Ajmera, the proprietor of JJ Gold House, a wholesaler in the eastern Indian city of Kolkata.
On Friday, local gold futures were trading around 49,100 rupees per 10 grams after hitting a one-month low of 48,537 rupees last week.
A Mumbai-based bullion dealer with a gold importing bank said jewellers are making small purchases at lower prices, but many are waiting for the country’s annual budget, which will be presented on Feb.1.
In Hong Kong demand was muted with the metal being sold between a discount of $2 to a premium of about $1.50, while in Japan gold traded flat to spot prices.—Reuters